Organizational capabilities as the key to Sustainable
Cécile van Oppen*
Squarewise, Claude Debussylaan 48, 1082 MD Amsterdam, The
Squarewise, Claude Debussylaan 48, 1082 MD Amsterdam, The
* Corresponding author
Abstract: Whereas organizations traditionally approach sustainability from a technical perspective, and strive to “do things better”, we argue that the sustainability challenges of our time require companies to “do things differently”. This differentiation and market creation strategy will allow companies to sufficiently leverage sustainability as a business opportunity. We introduce the concept of Sustainable Innovation (SI) as the means for companies to create new markets through the synergetic relationship of sustainability and innovation. Although academic literature has broadly noted the significance of SI, we fill the gap in literature by describing how to achieve SI. We argue that in order to achieve SI, different organizational capabilities are needed. After providing a theoretical basis as well as a theoretical framework, we consequently offer an organizational capabilities model that facilitates SI, supported with fourteen hypotheses. The hypotheses are formed through academic literature and case study research.
Keywords: Sustainability; Sustainable Innovation; Organizational Capabilities
The growing concerns for sustainability within the business landscape compel organizations to leverage sustainability as a business opportunity. We define sustainability as “…meeting the needs of the present without compromising the ability of future generations to meet their own needs”1. We argue that traditional organizations are not fully equipped for this challenge. We propose that this is not because these organizations lack motivation, but rather because sustainability is approached through a primarily technical perspective. This perspective inherently leads to technically-oriented solutions geared at energy efficiencies, waste reductions and resource efficiencies (to name a few). In order to make the sustainable transition and leverage sustainability as a 1
Brundtland, G., and Khalid, M. 1987. Our Common Future. World Commission on Environment and Development. Oxford University Press.
competitive edge, the challenge lies not so much in “doing things better” as the technical perspective facilitates, but rather “doing things differently”. In order to make the shift to “doing things differently”, companies have to become capable of what we call Sustainable Innovation (SI): “the synergetic relationship between sustainability and innovation in the core of organizations that drives the development of radically new business (products, services, processes, systems and behavior) and in doing so creating long-term social, environmental as well as economic value”. Academic literature has long encouraged sustainability as a topic for the corporate agenda by focusing on the (un)profitability of incorporating sustainability practices (e.g. Lee , Faff & Langfield-Smith, 2009; Hill, Ainscough & Shank, 2007; Margolis, Elfenbein & Walsh, 2007; Pava & Krausz, 1996). More recently, sustainability has been identified as the new driver for innovation (Nidumolu, Prahalad & Rangaswami, 2009; Jorna, 2006; MacGregor, Espinach & Fontrodona, 2007), arguing that only companies that make sustainability a goal will achieve the desired competitive advantage. Little literature, however, has discussed how organizations can innovate sustainably. Yet it is just this how question that is vital when equipping an organization to meet the sustainability challenge, and leverage it as a business opportunity.
We argue that SI within organizations can be facilitated through fostering certain organizational capabilities. In this paper we will identify the capabilities that are conducive for SI, based on existing literature...
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